NOT FOR QUOTATION WITHOUT PERMISSION OF THE AUTHOR
SHRINKING DEKAND IN AN AGEING INDUSTRY: .
THE CASE OF STEEL
R. Ballance
April 1985 C?-85-10
C o Z Z a b o r a t i v e P a p e r s report work which has not been performed solely at the International Institute for Applied Systems Analysis and which has received only limited review. Views or opinions expressed herein do not necessarily represent those of the Institute, its National Member Organizations, or other organi- zations supporting the work.
INTERNATIONAL INSTITUTE FOR APPLIED SYSTEMS ANALYSIS
A-2361 Laxenburg, Austria
THE AUTHOR
R o b e r t B a l l a n c e i s a r e s e a r c h s c h o l a r a t t h e I n t e r n a t i o n a l I n s t i t u t e f o r A p p l i e d Systems A n a l y s i s , S c h l o s s L a x e n b u r g , 2 3 6 1 L a x e n b u r g , A u s t r i a . The v i e w s e x p r e s s e d h e r e i n a r e t h o s e o f t h e a u t h o r a n d do n o t n e c e s s a r i l y r e f l e c t t h o s e of o r g a n i z a t i o n s w i t h which h e i s a s s o c i a t e d .
FOREWORD
Many of today's most significant socioeconomic problems, such as slower economic growth, the decline of some established industries, and shifts in patterns of foreign trade, are inter- or transnational in nature. But these problems manifest themselves in a variety of ways;
both the intensities and the perceptions of the problems differ from one country to another, so that intercountry comparative analyses of recent historical developments are necessary. Through these analyses we attempt to identify the underlying processes of economic structural change and formulate useful hypotheses concerning future developments. The under- standing of these processes and future prospects provides the focus for ILASA's project on Comparative Analysis of Economic Structure and Growth.
Our research concentrates primarily on the enipirical analysis of interregional and intertenporal economic structural change, on the sources of and constraints on economic growth, on problems of adaptation to sudden changes, and especially on problems arising from changing patterns of international trade, resource availability, and technology. In this paper R. Ballance considers fundamental changes in one of the most long- standing industries in the last two decades and emphasizes the need for a systematic evaluation of an industrial performance.
Anatoli Smyshlyaev Project Leader
Comparative Analysis of
Economic Structure and Growth
CONTENTS
1. INTRODUCTION
1.1 Domestic Links with User Industries 1.2 International Complications
2. INTEGRATED STEEL MAKING IN A NEW ENVIRONMENT 2.1 Contracting Demand and Expanding Capacity
2.2 Competition from New Sources: the Role of Mini-mills 3. INTERNATIONALIZATION OF THE STEEL INDUSTRY
3.1 Links with Foreign Markets
3.2 International Migration of Steel-using Activities 4. EPILOGUE
APPENDIX: Estimates of Apparent Consumption of Steel Products NOTES
REFERENCES
SHRINKING DEMAND IN
AN
AGEING INDUSTRY: THE CASE OF STEEL Robert Ballance1. INTRODUCTION
Because the demand for steel is a derived one which depends on conditions in steel-using industries, one appealing means of examining the industry's recent history is in terms of its links with these industries. Alternative approaches, for example those which highlight the technological dimensions of the industry's evolution, the impact of national policies related to the steel industry or other features, may be equally appropriate. In fact, the
industry's difficulties are so complex and varied as to require analysis from a variety of viewpoints. Many of the salient problems are, neverkheless,
'demand-related' and readily lend themselves to a discussion couched in these terms.
Following a prolonged period of sustained growth and expansion, the
industry's prospects changed drastically during the 1970s. The first section of this paper looks at some of the factors
--
both domestic and foreign--
which have contributed to this transition by altering steel's relationships with its user industries. Among the domestic factors, fundamental changes in
the composition of economic activity have diminished the industry's relative importance in many developed economies. The consequences of these
macro-economic shifts have been compounded by industry-specific trends which have permanently reduced the dependence of steel-using industries such as automobiles, machine tools, shipbuilding or construction. The new
vulnerability of many integrated steel producers can also be traced to
international considerations. Relative changes in the global configuration of the steel industry have altered producers' links with foreign markets and their relationships with foreign competitors. Although the steel industry in all established centres of production has experienced considerable adjustment pressure, the nature of global shifts in production and trade have accentuated plight of the American and West European industries.
The second section looks at the change in domestic conditions in more detail. Statistical evidence documenting the fall in demand for steel
products in major markets is examined. Major producers regarded the signs of decelerating demand as being merely a temporary aberration. Steel firms
m a i n t a i n e d a g e n e r a l l y c o m p l a c e n t a t t i t u d e t o w a r d s t h e i r b u y e r s and c l u n g t o a n i n v e s t m e n t s t r a t e g y w h i c h , i n t h e l o n g e r r u n , a c c e p t e d e x c e s s c a p a c i t y a s n e c e s s a r y i n o r d e r t o p r o t e c t m a r k e t s h a r e i n t i m e s of maximum demand. A s e c o n d , b u t e q u a l l y i m p o r t a n t development which i s emphasized i n t h i s s e c t i o n i s t h e r a p i d emergence o f s m a l l , n o n - i n t e g r a t e d m i n i - m i l l s . T h e s e new
p r o d u c e r s h a v e c a p t u r e d a s much a s one f i f t h o f some d o m e s t i c m a r k e t s and t h e i r s h a r e c a n be e x p e c t e d t o i n c r e a s e s i g n i f i c a n t l y i n t h e n e x t d e c a d e . The s u c c e s s of m i n i - m i l l s i s p a r t l y e x p l a i n e d by t h e c o s t a d v a n t a g e s t h e y e n j o y r e l a t i v e t o i n t e g r a t e d p r o d u c e r s . However, t h e y h a v e a l s o d e v e l o p e d much c l o s e r l i n k s w i t h t h e i r b u y e r s and t h i s , t o o , h a s been a n i m p o r t a n t r e a s o n f o r t h e i r p r o g r e s s .
The t h i r d s e c t i o n l o o k s a t some o f t h e f o r c e s c o n t r i b u t i n g t o a growing i n t e r n a t i o n a l i z a t i o n o f s t e e l m a r k e t s . With t h e p o s s i b l e e x c e p t i o n o f J a p a n , s t e e l had t r a d i t i o n a l l y b e e n a 'home-bound' i n d u s t r y . However, f o l l o w i n g t h e slump i n world demand f o r s t e e l , many i n t e g r a t e d p r o d u c e r s were f o r c e d t o t u r n t o f o r e i g n m a r k e t s i n o r d e r t o a l l e v i a t e t h e problem of mounting e x c e s s
c a p a c i t y . O t h e r f a c t o r s , n o t a b l y t h e growing v a r i e t y of s t e e l p r o d u c t s demanded by u s e r s and a g r a d u a l d e c l i n e i n t r a n s p o r t c o s t s , a l s o c o n t r i b u t e d
t o t h e h e i g h t e n e d i n t e r e s t i n e x p o r t s . - S t e e l e x p o r t s , b o t h d i r e c t and i n d i r e c t ( i . e . , t r a d e i n s t e e l - u s i n g p r o d u c t s s u c h a s c a r s , t o o l s , o r m a c h i n e r y ) , r o s e . One c o n s e q u e n c e was t h a t s t e e l p r o d u c e r s w e r e f u r t h e r d i s t a n c e d from t h e i r b u y e r s . And many o f t h e l a r g e r i n t e g r a t e d f i r m s were s l o w t o a d j u s t t o t h e new r e q u i r e m e n t s e x p e c t e d o f s e l l e r s i n f o r e i g n m a r k e t s . A m a j o r r e a s o n f o r t h i s s h o r t c o m i n g i s t h a t t h e s t e e l i n d u s t r y i s n o t y e t a n
i n t e r n a t i o n a l one i n t h e same s e n s e a s many o t h e r m a t u r e i n d u s t r i e s a r e . Major s t e e l f i r m s a r e c o n s p i c u o u s by t h e i r r e l u c t a n c e t o e s t a b l i s h p r o d u c t i o n
s i t e s i n f o r e i g n m a r k e t s . As s t e e l - u s i n g i n d u s t r i e s s u c h a s a u t o m o b i l e s and s h i p b u i l d i n g r e l o c a t e d d u r i n g t h e 1 9 7 0 s , t h e i r s t e e l c o n t r a c t s moved w i t h them. S t e e l f i r m s have o n l y r e c e n t l y begun t o r e s p o n d t o t h i s d a n g e r , a l t h o u g h t h e i r t r a d i t i o n a l home-market o r i e n t a t i o n c o u p l e d w i t h t h e i r
f i n a n c i a l p r o b l e m s and v a s t s i z e , c o n t i n u e t o make t h e t r a n s i t i o n t o a g e n u i n e i n t e r n a t i o n a l i n d u s t r y a d i f f i c u l t o n e .
1.1 D o m e s t i c L i n k s w i t h User I n d u s t r i e s
The s t e e l i n d u s t r y ' s d o m e s t i c l i n k s w i t h o t h e r f i e l d s o f i n d u s t r y c a n b e s k e t c h e d from two d i f f e r e n t , b u t complementary, v i e w p o i n t s . At t h e
economy-wide l e v e l , t o d a y ' s major growth a r e a s a r e q u i t e d i s t i n c t from t h o s e which were p r o m i n e n t p r i o r t o 1960. They i n c l u d e t e l e c o m u n i c a t i o n s , e n e r g y , a e r o s p a c e and c o m p u t e r s . U n l i k e t h e l e a d i n g i n d u s t r i e s d u r i n g t h e f i r s t two t h i r d s o f t h i s c e n t u r y , t h e s e new f i e l d s a r e n o t i n t e n s i v e u s e r s o f s t e e l . I n most d e v e l o p e d c o u n t r i e s , t h e demand f o r s t e e l i s d e p e n d e n t on a s e t o f u s e r
i n d u s t r i e s w h i c h , t h e m s e l v e s , a r e l o s i n g ground r e l a t i v e t o o v e r a l l economic a c t i v i t y . T h e r e a r e o t h e r s t r u c t u r a l c h a n g e s t h a t a r e e q u a l l y b r o a d i n s c o p e and h a v e , h a d s i m i l a r c o n s e q u e n c e s . Because t h e s e r v i c e s e c t o r ' s s h a r e i n GDP i n d e v e l o p e d c o u n t r i e s h a s t e n d e d t o grow r e l a t i v e t o t h e p r o d u c t i o n o f
m a t e r i a l g o o d s , i n v e s t m e n t h a s g i v e n way t o c o n s u m p t i o n i n t h e e x p e n d i t u r e o f n a t i o n a l income. Both s e r v i c e s and c o n s u m p t i o n a r e l e s s s t e e l - i n t e n s i v e t h a n i n v e s t m e n t i n t h e p r o d u c t i o n of m a t e r i a l goods. Thus, t h e r e l a t i v e d e c l i n e i n t h e i n d u s t r y ' s s h a r e i n d o m e s t i c o u t p u t and employment i n many d e v e l o p e d
c o u n t r i e s i s l i k e l y t o c o n t i n u e .
T h e s e macro-economic s h i f t s h a v e b e e n r e - e n f o r c e d by i n d u s t r y - s p e c i f i c d e v e l o p m e n t s . F i r s t , t e c h n i c a l a d v a n c e s h a v e r e d u c e d t h e s t e e l r e q u i r e m e n t s o f v a r i o u s i n d u s t r i e s . West German f i g u r e s s h o w i n g s t e e l i n p u t s p e r 1000 k g . o f f i n i s h e d p r o d u c t s u g g e s t t h e s i g n i f i c a n c e o f t h e s e a d v a n c e s f o r s t e e l p r o d u c e r s . D u r i n g t h e 1 9 7 0 s , German s t e e l r e q u i r e m e n t s i n t h e f i e l d o f
e l e c t r i c a l m a c h i n e r y d e c l i n e d by 10 p e r c e n t a n d by 9 p e r c e n t i n t h e c a s e o f r o l l i n g s t o c k . The d r o p was e v e n more a b r u p t i n t h e c a s e o f s h i p b u i l d i n g where s t e e l u s a g e f e l l by 2 3 p e r c e n t , w h i l e f o r n u t s , b o l t s , a n d s i m i l a r p r o d u c t s s t e e l i n p u t s w e r e r e d u c e d by 11 p e r c e n t .
1 1
S e c o n d , t h e e m e r g e n c e o f new p r o d u c t i o n t e c h n i q u e s , combined w i t h c h a n g i n g p a t t e r n s o f f i n a l demand, h a s t e n e d t h e s u b s t i t u t i o n o f a l u m i n i u m , p l a s t i c s , a n d h i g h l y r e s i s t a n t g l a s s f o r s t e e l i n many t r a d i t i o n a l u s e s . The s u b s t i t u t i o n p r o c e s s was p a r t i c u l a r l y r a p i d i n t h e a u t o m o b i l e i n d u s t r y . A f t e r 1 9 7 5 , t h e amount o f s t e e l p e r a u t o d e c l i n e d s i g n i f i c a n tly.2/
F o r s t e e l p r o d u c e r s i n N o r t h A m e r i c a a n d W e s t e r n E u r o p e , t h e d i f f i c u l t i e s c r e a t e d by s u b s t i t u t i o n w e r e compounded by r i s i n g a u t o i m p o r t s o r by d o w n s i z i n g o f d o m e s t i c m o d e l s . I n t h e c a s e o f t h e US t h e s e two i n i t i a t i v e s , a l o n e , a r e e s t i m a t e d t o h a v e c u t t h e s t e e l r e q u i r e m e n t s o f t h e American a u t o m o b i l e i n d u s t r y by 8-10 m i l l i o n s h o r t t o n s p e r annum i n r e c e n t y e a r s--
e q u i v a l e n t t o 10 p e r c e n t o f t h e US s t e e l m a r k e t.2/
W h i l e t h e i m p e t u s f o r t h e s e t r e n d s may d i f f e r , t h e i r c o n s e q u e n c e s c a n a l l b e d e p i c t e d i n t e r m s o f s t e e l ' s l i n k s w i t h i t s u s e r i n d u s t r i e s . The
economy-wide t y p e s o f s t r u c t u r a l c h a n g e s d e s c r i b e d a b o v e would n o t n e c e s s a r i l y d i m i n i s h t h e i m p o r t a n c e o f t h e s t e e l i n d u s t r y ' s r o l e a s a m a j o r s u p p l i e r t o o t h e r m a n u f a c t u r e r s o r t o o t h e r s e c t o r s s u c h a s c o n s t r u c t i o n and
i n f r a s t r u c t u r e . However. s u c h f u n d a m e n t a l s h i f t s i n e c o n o m i c s t r u c t u r e w i l l mean t h a t t h e r e l a t i v e i m p o r t a n c e o f s t e e l w i t h i n t h e m a n u f a c t u r i n g s e c t o r o f d e v e l o p e d c o u n t r i e s w i l l s u r e l y c o n t i n u e t o d e c l i n e . On t h e o t h e r h a n d , t h e t y p e s o f i n d u s t r y - s p e c i f i c t r e n d s d e s c r i b e d h a v e a more d i r e c t i m p a c t on t h e i n d u s t r y ' s e c o n o m i c r e l a t i o n s h i p s w i t h i t s u s e r s . The new a b i l i t y t o
e c o n o m i z e on s t e e l i n p u t s a n d t h e i n r o a d s made by a l t e r n a t i v e m a t e r i a l s w i l l p e r m a n e n t l y a l t e r t h e s i g n i f i c a n c e o f t h e i n t e r - i n d u s t r y l i n k a g e s & / w h i c h p r o v i d e d t h e b a s i s f o r s t e e l ' s s t e a d y e x p a n s i o n t h r o u g h o u t m o s t o f t h i s c e n t u r y .
By t h e l a t e 1 9 7 0 s t h e n e t e f f e c t o f t h e s e f o r c e s h a d u n m i s t a k e a b l y
d i m i n i s h e d t h e i n d u s t r y ' s p r o s p e c t s . T h e r e h a d b e e n a d e f i n i t e d e p a r t u r e f r o m t h e l o n g - t e r m g r o w t h t r e n d t h a t c o u l d n o t b e a t t r i b u t e d t o c y c l i c a l f a c t o r s o r t o t h e d e s t a b i l i z i n g i m p a c t o f r i s i n g e n e r g y p r i c e s . I n J a p a n , f i g u r e s f o r t h e l a t e s t f i s c a l y e a r ( 1 9 8 3 ) show t h a t o n l y two o f t h e f i v e l a r g e s t s t e e l p r o d u c e r s , Nippon S t e e l and Kawasaki S t e e l , w e r e p r o f i t a b l e . S i m i l a r l y , j u s t t h r e e o f t h e s i x l a r g e s t A m e r i c a n f i r m s r e p o r t e d p r o f i t s i n t h e f i r s t q u a r t e r o f 1984 and much o f t h i s was from n o n - s t e e l a c t i v i t i e s . R e c e n t p e r f o r m a n c e i n o t h e r c o u n t r i e s was e q u a l l y d i s m a l . The two m a j o r F r e n c h f i r m s , S a c i l o r a n d U s i n o r , l o s t $1.8 b i l l i o n i n 1983 w h i l e B r i t i s h S t e e l C o r p o r a t i o n r e p o r t e d a
l o s s o f $ 1 9 1 m i l l i o n . ? / E x p l a n a t i o n s f o r t h i s b r u t a l r e v e r s a l i n t h e i n d u s t r y ' s p e r f o r m a n c e a r e v a r i e d a n d e x t e n d b e y o n d t h e t y p e s o f d o m e s t i c f a c t o r s d e s c r i b e d a b o v e . The p l i g h t o f some p a r t s o f t h e i n d u s t r y was g r e a t l y c o m p l i c a t e d by d r a s t i c s h i f t s i n t h e p a t t e r n o f w o r l d p r o d u c t i o n a n d t r a d e which a r e examined b e l o w .
1.2 I n t e r n a t i o n a l C o m p l i c a t i o n s
S t a r t i n g a r o u n d 1870 t h e s t e e l i n d u s t r y i n most of t o d a y ' s r i c h c o u n t r i e s embarked on a f u l l c e n t u r y of growth and e x p a n s i o n , s p u r r e d by t h e
c o n s t r u c t i o n of v a s t s h i p p i n g f l e e t s , r a i l w a y s y s t e m s and m a c h i n e s . I n f a c t , t h e e x i s t e n c e o f a s t e e l i n d u s t r y was g e n e r a l l y r e g a r d e d a s a p r e r e q u i s i t e f o r s u c c e s s f u l i n d u s t r i a l i z a t i o n . The w i d e s p r e a d i m p o r t a n c e g i v e n t o t h e
development of a n a t i o n a l s t e e l i n d u s t r y , c o u p l e d w i t h e x p a n d i n g d o m e s t i c demand, l e d t o a g r a d u a l i n c r e a s e i n t h e number of s t e e l - p r o d u c i n g c o u n t r i e s . T h i s s t e a d y upward t r e n d was marred by o c c a s i o n a l c y c l i c a l f l u c t u a t i o n s , f o u r o f which o c c u r r e d i n t h e high-growth p e r i o d b e t w e e n 1946 and 1970.61 A s t h e i n d u s t r y c o n t i n u e d t o expand, c h a n g e s i n t h e w o r l d s t e e l h i e r a r c h y were o c c u r r i n g . The UK was t h e w o r l d ' s p r e d o m i n a n t s t e e l p r o d u c e r p r i o r t o 1900 when i t was r e p l a c e d by t h e US. American l e a d e r s h i p r e a c h e d a z e n i t h a r o u n d 1920 when i t a c c o u n t e d f o r 60 p e r c e n t of w o r l d p r o d u c t i o n . S i n c e t h e n , t h e US s h a r e h a s s t e a d i l y f a l l e n , amounting t o l e s s t h a n 12 p e r c e n t by t h e e a r l y 1 9 8 0 s . But u n t i l t h e 1970s b u o y a n t demand meant t h a t most m a j o r s t e e l
p r o d u c e r s were n o t p l a g u e d by c o n t r a c t i v e p r o b l e m s a r i s i n g from e x c e s s c a p a c i t y , t h e t h r e a t of s u b s t i t u t e s o r d e c l i n i n g p r o f i t s .
T a b l e 1 documents t h e c h a n g i n g map of w o r l d s t e e l p r o d u c t i o n s i n c e 1950.
Two s i g n i f i c a n t f e a t u r e s c a n be n o t e d . F i r s t , t h e s h a r e s of w o r l d p r o d u c t i o n i n J a p a n , E a s t e r n Europe and o t h e r c o u n t r i e s ( m a i n l y d e v e l o p i n g c o u n t r i e s ) h a v e a l l r i s e n . T o g e t h e r , t h e t h r e e g r o u p s o f c o u n t r i e s a c c o u n t e d f o r a l m o s t 66 p e r c e n t of w o r l d s t e e l p r o d u c t i o n i n 1982. T h e s e g a i n s o c c u r r e d a t t h e e x p e n s e of p r o d u c e r s i n North America and t h e EEC. I n t h e f o r m e r i n s t a n c e , t h e r e l a t i v e c o n t r a c t i o n was an a b r u p t one a l t h o u g h , f o r E u r o p e a n s t e e l m a k e r s , i t h a s been more g r a d u a l . A second i m p o r t a n t f e a t u r e c o n c e r n s t h e growth o f w o r l d s t e e l p r o d u c t i o n . The l e v e l o f w o r l d o u t p u t f e l l s i g n i f i c a n t l y i n
1975. A f t e r r e s u m i n g i t s upward t r e n d , o u t p u t d e c l i n e d a g a i n i n 1980 and c o n t i n u e d i t s downward s l i d e i n l a t e r y e a r s . Both f a c t s s u g g e s t t h a t t h e c o n t r a c t i v e p r e s s u r e on s t e e l p r o d u c e r s i n N o r t h America and t h e EEC h a s b e e n c o n t i n u o u s and i n t e n s e s i n c e t h e e a r l y 1 9 7 0 s . L a t e c o m e r s l i k e t h e USSR and J a p a n a r e now t h e p r e m i e r s t e e l p r o d u c i n g n a t i o n s . I n 1 9 8 3 , t h e s e two c o u n t r i e s a c c o u n t e d f o r 23 and 14.7 p e r c e n t o f t h e w o r l d ' s c r u d e s t e e l p r o d u c t i o n r e s p e c t i v e l y
.l/
But t h e problems f o r p r o d u c e r s i n m a t u r e s t e e l m a r k e t s w e r e n o t s i m p l y t h e r e s u l t of a r e - a l i g n m e n t i n n a t i o n a l p r o d u c t i v e c a p a c i t i e s . T h e i r p o s i t i o n a s l e a d i n g e x p o r t e r s of s t e e l was a l s o e r o d e d . T a b l e 2 shows d a t a on w o r l d s t e e l e x p o r t s which c l o s e l y p a r a l l e l s t r e n d s i n w o r l d p r o d u c t i o n . I n t h e t h r e e d e c a d e s s i n c e 1950 t h e North American s t e e l i n d u s t r y h a s b e e n r e d u c e d t o a minor e x p o r t e r w h i l e t h e EEC h a s s e e n i t s s h a r e f a l l by more t h a n one t h i r d . A g a i n , t h e r e d i s t r i b u t i o n was m a i n l y a t t r i b u t a b l e t o e x p o r t g a i n s i n J a p a n , d e v e l o p i n g c o u n t r i e s and s o c i a l i s t c o u n t r i e s .
T h i s b r i e f o v e r v i e w i s s u f f i c i e n t t o s u g g e s t t h a t c o n d i t i o n s i n t h e
w o r l d ' s s t e e l i n d u s t r i e s v a r y w i d e l y w i t h t h e p l i g h t of t h e N o r t h American and European p r o d u c e r s b e i n g t h e most s e r i o u s . I r o n i c a l l y , i f a n a s s e s s m e n t o f w o r l d s t e e l p r o s p e c t s had been c a r r i e d o u t i n t h e mid-1950s, i t m i g h t w e l l h a v e n o t e d s e v e r a l c o n v i n c i n g r e a s o n s f o r s t e e l m a k e r s i n b o t h t h e s e r e g i o n s t o
l o o k forward t o a l o n g , i f n o t i n d e f i n i t e , p e r i o d of pre-eminence. The N o r t h American i n d u s t r y had b e e n u n t o u c h e d by t h e war and c o u l d e a s i l y e n l a r g e on
Table 1 World steel production, 1950-1982 Year
---
Shares in world total (percentage)---
North European Other Eastern Other America ~omrnunit~fi/ Western Europe Japan Europe countries World total (thousand metric .tons) a/ Figures for 1981-83 exclude Ireland.-
Source: Production data for 1950, 1960 and 1970 from ECE (1976:19, annexy. Data for 1981-83 from IISI (1984:3).Ii
$ 5 ,
o e 4 u u u m u m a b m a m h rl lI U O
I O r ) I
e x i s t i n g c a p a c i t y i n o r d e r t o m a i n t a i n i t s p o s i t i o n of world l e a d e r s h i p . A l t h o u g h much o f t h e E u r o p e a n . c a p a c i t y had been d e m o l i s h e d by 1 9 4 5 , t h e
i n d u s t r y was r e b u i l d i n g a t a r a p i d pace and would n o t be encumbered by
o b s o l e t e , pre-war c a p a c i t i e s and t e c h n o l o g i e s . More i m p o r t a n t , b o t h r e g i o n s had a l o n g - e s t a b l i s h e d t r a d i t i o n i n s t e e l and c o u l d be a s s u r e d t h a t t h e i r r e g i o n a l m a r k e t s would c o n t i n u e t o a c c o u n t f o r t h e b u l k of w o r l d demand.
D e s p i t e t h e s e a d v a n t a g e s , many American and European f i r m s found t h e m s e l v e s i n a p r e c a r i o u s s i t u a t i o n by t h e mid 1970s. The f o l l o w i n g s e c t i o n l o o k s a t some o f t h e d o m e s t i c o r i n t e r n a l f a c t o r s which h a v e c o n t r i b u t e d t o t h i s r e v e r s a l . 2 . INTEGRATED STEEL MAKING I N A NEW ENVIRONMENT
2 . 1 C o n t r a c t i n g Demand and Expanding C a p a c i t y
The c o m p i l a t i o n of i n t e r - i n d u s t r y d a t a n e c e s s a r y t o document t h e c h a n g i n g r e l a t i o n s h i p s between s t e e l and i t s u s e r i n d u s t r i e s would be a m a j o r
u n d e r t a k i n g which i s beyond t h e s c o p e o f t h i s p a p e r . However, i n d i r e c t
e v i d e n c e i s a v a i l a b l e which p r o v i d e s s t r o n g e v i d e n c e s u g g e s t i n g t h a t t h e f a l l i n demand f o r s t e e l was, s o m e t i m e s , a p r e c i p i t o u s o n e . T a b l e 3 shows t r e n d s i n p r o d u c t i o n and c o n s u m p t i o n f o r t h i r t e e n m a j o r i r o n and s t e e l c o m m o d i t i e s and i n t h r e e m a j o r s t e e l - p r o d u c i n g r e g i o n s . The p r o d u c t i o n d a t a , a l t h o u g h n o t d i r e c t l y r e l e v a n t t o t h e p r e s e n t d i s c u s s i o n , c o n f i r m t h e i m p o r t a n c e o f t h e s e m a j o r p r o d u c e r s f o r t h e w o r l d s t e e l i n d u s t r y . P r o d u c t i o n i n EEC, where t h e c o n t r a c t i v e e f f e c t s of demand w e r e most e v i d e n t , was between o n e e i g h t h and o n e q u a r t e r o f w o r l d t o t a l f o r t h e commodities shown i n t a b l e 3 . T o g e t h e r , t h e t h r e e r e g i o n s s u p p l i e d a s much a s o n e h a l f o f world p r o d u c t i o n o f many o f t h e s e s t e e l c o m m o d i t i e s and i n v a r i a b l y a c c o u n t e d f o r more t h a n o n e q u a r t e r o f t h e t o t a l .
D a t a f o r ' a p p a r e n t
'
c o n s u m p t i o n , 8 ~ d e f i n e d t o be d o m e s t i c p r o d u c t i o n p l u s i m p o r t s l e s s e x p o r t s , a r e more r e l e v a n t t o t h e p r e s e n t d i s c u s s i o n . A f a l l i n l e v e l s o f c o n s u m p t i o n c a n be i n t e r p r e t e d a s a c l e a r i n d i c a t i o n o f a c o n t r a c t i o n o f demand owing t o a weakening o f s t e e l ' s l i n k a g e s w i t h i t s u s e r i n d u s t r i e s a n d / o r a s h i f t i n f i n a l demand away from s t e e l - i n t e n s i v ea c t i v i t i e s . L e v e l s o f c o n s u m p t i o n d e c l i n e d s i g n i f i c a n t l y i n many i n s t a n c e s . C o n t r a c t i o n s were most pronounced i n t h e EEC and f o r commodities a t t h e e a r l i e r p a r t o f t h e f a b r i c a t i o n c h a i n
--
p i g i r o n , w i r e r o d s , a n g l e s , s h a p e s and s e c t i o n s . F u r t h e r m o r e , f o r t h o s e commodities where l e v e l s o f c o n s u m p t i o n d i d i n c r e a s e , t h e r i s e was o f t e n m a r g i n a l and was by no means c o m p a r a b l e w i t h t h e c o r r e s p o n d i n g growth o f income o r t o t a l m a n u f a c t u r i n g v a l u e added i n t h o s e c o u n t r i e s . Even J a p a n , which i s t o u t e d t o h a v e t h e w o r l d ' s most e f f i c i e n t and dynamic s t e e l i n d u s t r y , shows a d e c l i n e i n t h e consumption of s e v e r a l m a j o r9 / i t e m s . -
A c r u c i a l f a c t o r i n e x p l a i n i n g t h e c u r r e n t p l i g h t o f many American and E u r o p e a n s t e e l f i r m s was t h e i r m i s j u d g e m e n t o f t h e s e t r e n d s a s t h e y b e g a n t o emerge i n t h e e a r l y 1 9 7 0 s . F i r m s i n c o r r e c t l y i n t e r p r e t e d s i g n s o f
d e c e l e r a t i n g demand a s a n o t h e r c y c l i c a l a b e r r a t i o n w i t h no p r o l o n g e d i m p a c t . Such a t t i t u d e s were n o t i m p l a u s i b l e when p l a c e d i n t h e l o n g e r t e r m c o n t e x t o f t h e i n d u s t r y ' s d e v e l o p m e n t . The i n d u s t r y was l o n g accustomed t o a p a t t e r n o f e x p a n d i n g demand and had c o n t i n u a l l y i n c r e a s e d o p t i m a l p l a n t s i z e t o t a k e a d v a n t a g e of t h i s t r e n d . The f i r s t moves toward l a r g e r - s i z e d u n i t s b e g a n a s e a r l y a s 1860 a n d , by 1900, a n n u a l p l a n t c a p a c i t y i n many i n t e g r a t e d i r o n and s t e e l u n i t s was 100,000-200,000 t o n n e s . P l a n t s i z e was c o n t i n u a l l y expanded;
i n 1920, a t y p i c a l r o l l i n g m i l l had a n a n n u a l c a p a c i t y of 600,000 t o n n e s . The
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advent of huge open pit mines and the later shift from open hearth furnaces to oxygen conversion hastened the move to larger unit size throughout the entire production process. Later, the Japanese were building integrated units with capacities of 3-10 million tonnes. Even after the demand for steel began to fall, massive investment programmes, typified by the British Steel
Corporation's expansion programme and the French Fos development on the Mediterranean coast rolled on. Surprisingly, the rate of growth in steel capacity actually accelerated in 1975-77 although world demand peaked in 1974.
By the time the steel industry embarked on an 'involuntary' transition to maturity, it was predominantly composed of large, vertically integrated, firms producing a wide range of steel products. Significantly, the investment
attitudes in the major firms was predominantly one of a "tons mentality''
--
keeping excess capacity to protect their market share at times of maximum steel demand. This approach was a reflection of the industry's long
experience during better times. Decisions were shaped by previous trends and comparatively little attention was given to an assessment of existing
circumstances in user industries or the likely determinants of future demand.
The consequences are vividly illustrated by the case of British Steel
Corporation where, in 1971, the government endorsed plans to expand productive capacity to almost 40 million tonnes by 1980. Ironically, 1980 began with a
tripartite dispute between government, industry and labour regarding a
production level of 15-16 million tonnes. The extent of the misjudgement was compounded by mid-1982, when actual capacity was only 14 million tonnes
.g/
Essentially, many parts of the industry had lost contact with their buyers and were unable to accurately judge the consequences of steel's changing
relationships with its users.
The cumulative effects of these miscalculations will take some time to redress. Steel capacity in OECD countries is currently about 600 million tons while consumption in 1984, which now appears to be a year of strong recovery, will probably not reach 440 million tons.g/ The problem of overcapacity is acute in the EEC. Under pressure from the European Commission, steelmakers have agreed to reduce capacity by 26.7 million tons in 1985 which would mean that their total steel-making capabilities would be 142 million tons by the end of that year. But demand (European consumption plus net exports) is forecasted to be 109 million tons in that year, implying that the problem of excess capacity will persist in future years. Similar steps are being taken in the US where five per cent of capacity (i.e., 7 million tons) was shut in 1983 and an equivalent amount is planned for closure in the next two years.
Likewise, in Japan, the world's biggest steelmaker
--
Nippon Steel--
hopes to reduce its capacity by fifteen per cent in the next two years.g/ Butefforts to rationalize the industry have been slowed by the political problems they have raised everywhere, particularly in Western Europe and North America where reductions would be most substantial. These problems, in turn, have contributed to the strong protectionist measures, advocated by governments and industry strategists alike, as a means of delaying the necessary reductions in work forces and plant size
.s/
2.2 Competition from New Sources: the Role of Mini-mills
Even if an accurate assessment of future demand had been available to investors in the mid-1970s, many firms would not have been in a position to adjust the level and composition of output accordingly. Investment costs had risen dramatically as plant size increased and the relative increase in these
e x p e n d i t u r e s meant t h a t f i r m s were h e a v i l y committed t o t h e c h o s e n
t e c h n o l o g i e s . A f u r t h e r c o m p l i c a t i o n was t h a t s t e e l makers had o n l y a l i m i t e d a b i l i t y t o make a l t e r a t i o n s i n t h e i r p r o d u c t i o n p r o c e s s e s once new c a p a c i t y was i n p l a c e .
The l a c k of f l e x i b i l i t y i n a d j u s t i n g t o c h a n g i n g c o s t s t r u c t u r e s and s h i f t s i n m a r k e t demand on t h e p a r t of i n t e g r a t e d s t e e l p r o d u c e r s c r e a t e d o p p o r t u n i t i e s f o r new c o m p e t i t o r s i n a l l t r a d i t i o n a l s t e e l - p r o d u c i n g c e n t r e s . F o r example, s m a l l , n o n - i n t e g r a t e d m i n i - m i l l s , now a p p e a r t o h a v e i r r e v e r s i b l y c a p t u r e d c e r t a i n s e g m e n t s o f t h e m a j o r p r o d u c e r s ' home m a r k e t s . While t h e m a j o r p r o d u c e r s mine t h e i r own o r e , t u r n o u t a wide r a n g e o f p r o d u c t s and want t o r e m a i n v e r t i c a l l y i n t e g r a t e d , m i n i - m i l l s m e l t s c r a p t o make s t e e l , buy i n s u p p l i e s and a r e seldom u n i o n i z e d . T h e s e p r a c t i c e s a c c o r d m i n i - m i l l s
s i g n i f i c a n t c o s t a d v a n t a g e s o v e r t h e i r l a r g e r c o m p e t i t o r s , b u t t h e y a l s o h a v e much more i n t i m a t e c o n t a c t s w i t h s t e e l u s e r s . Most began by f o c u s i n g o n n a r r o w g e o g r a p h i c m a r k e t a r e a s where t h e y e s t a b l i s h e d c l o s e w o r k i n g r e l a t i o n s w i t h t h e i r b u y e r s . Even t h o s e which h a v e now e n l a r g e d t h e s i z e of t h e m a r k e t
t h e y s e r v e c o n t i n u e t o b e h i g h l y s p e c i a l i z e d i n t h e p r o d u c t s t h e y s e l l
--
i n c l u d i n g s e a m l e s s p i p e , s t e e l r o o f i n g a n d w i r e r o d . T h i s e n a b l e s them t o b e t t e r a d a p t t h e p r o d u c t t o t h e u s e r ' s n e e d s and t o d e v o t e a r e l a t i v e l y l a r g e p o r t i o n o f t h e i r f u n d s t o R and D. M i n i - m i l l s t r a d i t i o n a l l y a c c o u n t e d f o r o n l y a s m a l l p o r t i o n o f t h e d o m e s t i c m a r k e t
--
3 t o 5 p e r c e n t o f t h e US m a r k e t i n t h e 1960s. P r i m a r i l y due t o t h e i r c o s t a d v a n t a g e s and i n t i m a t e c o n t a c t s w i t h b u y e r s , t h e m a r k e t s h a r e o f American m i n i - m i l l s h a s s o a r e d i n r e c e n t y e a r s and amounted t o 18 p e r c e n t i n 1983.c/
The s u c c e s s f u l development o f m i n i - m i l l s h a s e r o d e d a m a j o r b a r r i e r t o e n t r y w i t h t h e s t e e l i n d u s t r y , t h e h i g h c o s t of i n i t i a l i n v e s t m e n t . A s i m i l a r t h r e a t t o i n t e g r a t e d s t e e l makers i s posed by new p r o d u c t i o n t e c h n o l o g i e s which, a s y e t , a r e o n l y i n t h e d e v e l o p m e n t a l p h a s e . I f p e r f e c t e d , new p r o d u c t i o n p r o c e s s e s p r o m i s e t o r e d u c e c o s t s and o p t i m a l p l a n t s i z e . One example i s ' t h i n s l a b c a s t i n g ' which i s i n t e n d e d t o c u t t h e s i z e o f s t e e l c a s t e r s and t h e number of r o l l i n g m a c h i n e s r e q u i r e d t o p r o d u c e s h e e t .
P r e v i o u s l y , i n v e s t m e n t s i n t h e s e m a c h i n e s c o s t a s much a s $500 m i l l i o n b u t may soon f a l l t o a s l i t t l e a s $10 m i l l i o n . % / T h e s e i n n o v a t i o n s w i l l g r e a t l y r e d u c e t h e c a p i t a l c o s t s t h a t h a v e h e l p e d t o r e s t r i c t e n t r y i n t o t h e s t e e l i n d u s t r y .
3 . INTERNATIONALIZATION OF THE STEEL INDUSTRY
3 . 1 L i n k s w i t h F o r e i g n M a r k e t s
Long t e r m s h i f t s i n p a t t e r n s o f d o m e s t i c demand a f f e c t e d t h e d i r e c t i o n a n d c o m p o s i t i o n o f w o r l d t r a d e . I n 1 9 5 0 , s t e e l e x p o r t s were l e s s t h a n 11 p e r c e n t o f w o r l d p r o d u c t i o n . However, t h i s s h a r e r o s e s t e a d i l y a n d , by 1 9 8 2 , e x c e e d e d 25 p e r c e n t of w o r l d s t e e l The growing v a r i e t y o f p r o d u c t s demanded by s t e e l u s e r s e n c o u r a g e d f i r m s t o expand t h e i r p r o d u c t r a n g e s , a p r a c t i c e t h a t b o o s t e d t r a d e between s t e e l - p r o d u c i n g c o u n t r i e s . A n o t h e r s i g n i f i c a n t t r a d e s t i m u l a n t was t h e emergence o f e x c e s s c a p a c i t y i n s e v e r a l d e v e l o p e d c o u n t r i e s ; a f t e r t h e slump a f t e r 1 9 7 4 , many l a r g e s t e e l p r o d u c e r s began t o look t o f o r e i g n b u y e r s a s a way t o a l l e v i a t e t h e i r p r o b l e m s .
F i n a l l y , t h e demand f o r s t e e l i n t h e LDCs h a s s t e a d i l y r i s e n a n d , c o u p l e d w i t h a long-term d e c l i n e i n t r a n s p o r t c o s t s , h a s c o n t r i b u t e d t o t h e growth i n w o r l d
s t e e l t r a d e . T h u s , a l a r g e p r o p o r t i o n of t h e s t e e l p r o d u c e r ' s b u y e r s were f a r removed from t h e p r o d u c e r . While t h i s i s a s i t u a t i o n common t o most modern i n d u s t r i e s , i t was new f o r many of t h e t r a d i t i o n - b o u n d s t e e l f i r m s .
G r a d u a l l y , e x p o r t i n g came t o p l a y a more i m p o r t a n t r o l e , p a r t i c u l a r l y f o r t h e European i n d u s t r y where e x c e s s c a p a c i t y was most s e r i o u s . The
s i g n i f i c a n c e of s t e e l e x p o r t s i s s u g g e s t e d by t h e f a c t t h a t , i n 1 9 7 6 , s t e e l consumption i n t h e w o r l d ' s m a j o r m a r k e t s was 4 9 m i l l i o n t o n s below t h e 1973 l e v e l and i n 1979 i t was s t i l l 34 m i l l i o n t o n s l e s s t h a n t h e o r i g i n a l f i g u r e . But b e c a u s e p r o d u c e r s had i n c r e a s e d b o t h t h e i r d i r e c t and i n d i r e c t e x p o r t s o f s t e e l , t h e c o r r e s p o n d i n g d e c l i n e s i n p r o d u c t i o n w e r e n o t s o g r e a t . R e l a t i v e t o 1973, t h e d r o p i n reduction was 34 m i l l i o n t o n s i n 1976 and o n l y 28
f 7
/
m i l l i o n t o n s i n 1979.-
T a b l e 4 documents t h i s t r e n d , showing a s t e a d y i n c r e a s e i n n e t e x p o r t s a s a s h a r e o f p r o d u c t i o n . By t h e end o f t h e 1 9 7 0 s , t o t a l e x p o r t s of s t e e l ( b o t h d i r e c t and i n d i r e c t ) a c c o u n t e d f o r 18.8 p e r c e n t o f p r o d u c t i o n i n t h e m a j o r s t e e l p r o d u c i n g c o u n t r i e s . A l t h o u g h more r e c e n t f i g u r e s ( p a r t i c u l a r l y w i t h r e g a r d t o n e t i n d i r e c t e x p o r t s ) a r e n o t a v a i l a b l e , t h e upward t r e n d a p p e a r s t o h a v e c o n t i n u e d i n t h e 1 9 8 0 s . With r e g a r d t o d i r e c t s t e e l e x p o r t s , t a b l e 5
shows c h a n g e s i n p r o d u c t i o n l e v e l s and e x p o r t s h a r e s f o r t h r e e m a j o r
c a t e g o r i e s o f s t e e l p r o d u c t s . A f a l l i n t h e p r o d u c t i o n o f b a s i c s t e e l i t e m s ( r o d s , a n g l e s , s h a p e s and s e c t i o n s ) o c c u r r e d i n s e v e r a l c o u n t r i e s . However, t r a d e i n t h e s e i t e m s
--
b o t h i m p o r t s and e x p o r t s--
expanded s t e a d i l y a n d , i n f a c t , by 1981 e x p o r t s a c c o u n t e d f o r 15 p e r c e n t o f p r o d u c t i o n among t h ec o u n t r i e s shown. The g r o w i n g i m p o r t a n c e o f t r a d e i n s t e e l p r o d u c t s i s e q u a l l y o b v i o u s f o r t h e two o t h e r m a j o r c a t e g o r i e s shown i n t a b l e 5 .
The r o l e bf t r a d e i n s t e e l p r o d u c t s i s , o f c o u r s e , i n f l u e n c e d by t h e e x t e n t t o which t r a d e b a r r i e r s h a v e l i m i t e d e x p o r t s . As p r o t e c t i o n i s t r e s t r a i n t s on t r a d e i n s t e e l p r o d u c t s h a v e p r o l i f e r a t e d , p o l i c y makers a n d s t r a t e g i s t s i n a few c o u n t r i e s
--
J a p a n , S o u t h Korea and Taiwan--
t u r n e d t h e i r a t t e n t i o n t o i n d i r e c t e x p o r t s ( i .e . , s h i p s , v e h i c l e s and machine t o o l s ) . The f i g u r e s i n t a b l e 6 show t h e volume and c o m p o s i t i o n o f i n d i r e c t s t e e l e x p o r t s o f J a p a n , W e s t e r n Europe and N o r t h America i n v a r i o u s y e a r s . C l e a r l y , i n d i r e c t e x p o r t s w e r e of l i t t l e s i g n i f i c a n c e i n t h e c a s e o f N o r t h America; t h a t r e g i o n was a n e t i m p o r t e r of s t e e l - u s i n g p r o d u c t s t h r o u g h o u t t h e1970s. A l t h o u g h t h e volume o f i n d i r e c t s t e e l e x p o r t s from Europe was a p p r o x i m a t e l y two and a h a l f t i m e s t h a t o f J a p a n i n 1 9 7 9 , t h e l a t t e r ' s i n d i r e c t i m p o r t s w e r e n e g l i g i b l e . Measured i n n e t t e r m s , J a p a n ' s i n d i r e c t e x p o r t s grew r a p i d l y and w e r e c o m p a r a b l e t o E u r o p e a n l e v e l s by t h e end of t h e 1970s.
The s u c c e s s f u l d e v e l o p m e n t o f i n d i r e c t e x p o r t s o f J a p a n e s e s t e e l had s e v e r a l c o n s e q u e n c e s a s s u g g e s t e d by t h e c h a n g i n g d i s t r i b u t i o n a c c o r d i n g t o p r o d u c t g r o u p s . I n 1 9 6 2 , t h e b u l k o f J a p a n ' s i n d i r e c t s t e e l e x p o r t s were a c c o u n t e d f o r by i n t e r m e d i a t e s t e e l p r o d u c t s , r o l l i n g s t o c k , and
n o n - e l e c t r i c a l m a c h i n e r y . T h a t r e l a t i o n s h i p h a d changed c o m p l e t e l y by 1979;
more t h a n 50 p e r c e n t o f s u c h t r a d e was d e p e n d e n t on e x p o r t s o f t h e a u t o i n d u s t r y ( p a s s e n g e r c a r s , c o m m e r c i a l v e h i c l e s , and p a r t s ) . The a u t o i n d u s t r y a c c o u n t e d f o r a much s m a l l e r s h a r e o f i n d i r e c t s t e e l e x p o r t s i n W e s t e r n Europe and North America
--
3 6 . 6 p e r c e n t and 30.4 p e r c e n t r e s p e c t i v e l y i n 1979.T a b l e 4 . Reduction and n e t e x p o r t s of m a j o r s t e e l p r o d u c i n g r e g i o n s !I/ s e l e c t e d y e a r s ( i n m i l l i o n s of m e t r i c t o n s o f s t e e l p r o d u c t s )
P r o d u c t i o n ( i n m i l l i o n s of m t r i c
t o n s o f s t e e l p r o d u c t s ) 173 224 287 33 7 303 325
Yet e x p o r t s o f s t e e 1 . b ' ( a s a p a r c e n t a g a o f p r o d u c t i o n ) :
Net d i r e c t e x p o r t s 6.4 7 . 1 7 . 3 9 . 2 1 2 . 9 1 2 . 0
Net i n d i r e c t e x p o r t s 4 . 0 3 . 6 3 . 8 4 . 2 6 . 9 6 . 8
g/ F i g u r e s i n c l u d e t h e p r o d u c t i o n and t r a d e of J a p a n . N o r t h America, t h e E u r o p e u C-nity ( e x c l u d i n g G r e e c e ) , A u s t r i a , S p a i n . Sweden and S w i t z e r l a n d . T r a d e between t h e US and Canada is e x c l u d e d .
- b/ Yet e x p o r t s a r e d e f i n e d t o be e x p o r t s l e s s i m p o r t s . Yet i n d i r e c t e x p o r t s r e f e r t o t r a d e i n s t e e l - u s i n g p r o d u c t s ( e . 8 . c a r s . . t o o l s , m a c h i n e r y ) .
Source: IISI. (1982:2)
0 - n m o o n n m e . . . ~ o m ~ ~ r n o - o
+ o . a + e n o - r N i L ; o N N o - - ? ? * ? ? * . * ? ?
C O N d . # d d . N " N . Q . r ( N O - m l d Q I O I I O r ( n r r n ~ n # o
d
# # Q O N O - d N -
. . .
+ N N O N d N N # NI # d O - . . O O n a Q O
# Q N # . - r ( n N
Q " 1 0 0 * 1 * 1 ? 0 "
. .
? ? q ? ? ? ? ? ? ?~ O ~ O O o # # o mn 0 0 Q o O o 0 . 0
# # ON d
4 N NN N . 4
- -
d U L
l 8 u
C ..I
0 l 8
d l d
,
d P 0s 0: Id
0 C
-
.IP d C - . I = .Id In o s 3
0 c l w
8 4 1 L
0 0
1 1 - a L
:2: 7
c u . d 0 0 - 1 P 8
a:: - 2 2 , :
.I. 8 . 8 0 a u n l L - 1 l 0 I .I-0 -.I c o : : . . . c 0 O O d P . O m - m - d m C C I d 0 o U u d - - - 3 1 d U U P U ~ . U 4
1 3 2 I
0 0 0 0 L L d L L
_
m - 0 0 - 4 U d d O O L I d s C w a S m
# . - 0 0 0 0 m o o U
Table 6. The v o l u w and composition of indirect steel exports by major producing regions ,5/ selected years
Japan Western Europe North America
1962 1970 1979
- - -
- - - 1962 1970 1979 1962 lplo 1979Trade in thousands of tons of finished steel equivalent Indirect
exports Yet indirect
exports b/ 9 8 0 4231 11698 5764 8679 12228 507 (-1207) (-1572)
By product group (as a percentage o f indirect exports) c/
1. Mon-electrical machinery 2. Electrical
u c h i n e r y and equiprent 3. Agricultural
u c h i n e r y and tractors 4. Polling stock 5. Passenger cars 6. C-ercial
vehicles 7. Motor-vehicle
parts 8. Domestic
appliances and equiprent 9. Interrediate
steel products 10.0ther
u n u f a c t u r e r e s
a/ Country coverage is the sras as shown in table 1.
- b/ Indirect exports less indirect imports.
-
c/ Percentages u y not add t o 1 0 0 due to rounding.-
Source: IJNIDO (1983:284).